With surprisingly little fanfare, the Santa Ana City Council voted unanimously last week to dissolve the city’s downtown improvement district. The final vote is scheduled Feb. 7, but it looks like the city will finally eliminate a controversial fee assessed on downtown businesses to fund promotional, marketing and security efforts. Good riddance.
Nearly 100 California cities have Business Improvement Districts, where business owners vote to tax themselves for activities that are supposed to uplift the area. It’s technically a fee because the funds can only be used for targeted rather than citywide improvements, but there’s nothing voluntary about it.
Santa Ana’s district has been a source of contention since its inception. The latest vote reflects a simmering concern that Downtown Inc., the nonprofit group that manages the project, has touted the area’s burgeoning restaurant and nightlife scene at the expense of Latino-oriented businesses. Critics say it promotes gentrification.
They have a point – one that seemed obvious since the 2008 vote establishing the district. As the Orange County Grand Jury noted in 2012, 73 businesses opposed the district’s creation and only 31 supported it. But the tally was based on total assessed value. Those 31 businesses represented nearly 60 percent of the district’s value.
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Essentially, larger businesses that could afford the fee had a disproportionate voice – and the grand jury concluded the funds “appear to have only benefited a few.” The issue remained a sore spot and by 2013 the city began “slashing the tax rates” and created a new group that “would do more Latino shop promotions,” as the VoiceofOC reported.
Santa Ana’s downtown is among the most interesting downtown areas in the county. We love the architectural and economic diversity of the area – including the Latino-oriented businesses as well as the evolving hipster-oriented entertainment scene.
All downtown Santa Ana businesses share the same interest in seeing the area’s continuing improvement, but the fee structure only bred conflict. By phasing it out, the city has a new opportunity to encourage a harmonious – and voluntary – effort to improve and market downtown’s many attractions.